Executive Summary

Jul 2019
Tobacco volume sales in Russia continue to fall but value sales increase as a result of rising taxation

The Russian tobacco industry continued to shrink in retail volume terms in 2018, while value sales in current terms increased, primarily due to a further rise in taxation.

Heated tobacco products continues to grow rapidly

The best performing category in percentage value growth terms in 2018 was once again heated tobacco products, with these having been introduced in Russia in 2014 by Philip Morris, which launched its Iqos tobacco heating device and HEETS heated tobacco sticks. The category then witnessed the entry of British American Tobacco in 2017 with its Glo and Neo Sticks brands.

JTI Russia further grows its volume share following the acquisition of Donskoy Tabak

The competitive landscape in cigarettes remained concentrated in 2018, with the vast majority of volume sales in the hands of four multinationals, namely JTI Russia, Philip Morris International, British American Tobacco and Imperial Tobacco Sales & Marketing. The leader, JTI Russia, further strengthened its position in 2018 following the acquisition of Donskoy Tabak.

Grocery retailers continue to dominate cigarette distribution

Although modern grocery outlets are growing in number in Russia and subsequently increasing their share of cigarette sales, particularly supermarkets, traditional independent small grocers remained the leading channel in 2018, while tobacco specialists continued to lead cigars and cigarillos and smoking tobacco. One of the most noticeable trends in terms of distribution has been the growing popularity of food/drink specialists, with this being spearheaded by the Krasnoe i Beloe retail chain.

Tobacco retail volume sales set to fall further over the forecast period but strong value growth predicted for heated tobacco products

Increasing excise taxes and a strong regulatory framework aimed at reducing smoking will continue to negatively impact the Russian tobacco market over the forecast period. This will particularly affect cigarettes, along with rising illicit trade and a further decline in smoking prevalence, with cigars and cigarillos and smoking tobacco also set to continue to struggle.

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Tobacco in Russia

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Overview

Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Russia with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Tobacco industry in Russia, our research will save you time and money while empowering you to make informed, profitable decisions.

When you purchase this report, you also get the data and the content from these category reports in Russia for free:

The Tobacco in Russia market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth
  • Production, imports by origin, exports by destination
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Tobacco in Russia?
  • What are the major brands in Russia?
  • Which sector of the tobacco products market is the largest by value sales in Russia?
  • Which sector of the tobacco products market has been growing the fastest, by volume and value, in Russia?
  • Which sector is the most heavily taxed in Russia?
  • Which companies dominate in the total tobacco market in Russia in terms of market share?
  • What is the distribution channel split for the tobacco products market in Russia?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Tobacco market research database.

Tobacco in Russia

EXECUTIVE SUMMARY

Tobacco volume sales in Russia continue to fall but value sales increase as a result of rising taxation
Heated tobacco products continues to grow rapidly
JTI Russia further grows its volume share following the acquisition of Donskoy Tabak
Grocery retailers continue to dominate cigarette distribution
Tobacco retail volume sales set to fall further over the forecast period but strong value growth predicted for heated tobacco products

OPERATING ENVIRONMENT

Legislation
Legislative overview
Summary 1 Legislation Summary at a Glance
Minimum legal smoking age
Smoking prevalence
Tar levels
Health warnings
Plain packaging
Advertising and sponsorship
Point-of-sale display bans
Smoking in public places
Flavoured tobacco product ban
E-vapour products

PRODUCTION/IMPORTS/EXPORTS

MARKET INDICATORS

Table 1 Number of Adult Smokers by Gender 2013-2018

MARKET DATA

Table 2 Sales of Tobacco by Category: Volume 2013-2018
Table 3 Sales of Tobacco by Category: Value 2013-2018
Table 4 Sales of Tobacco by Category: % Volume Growth 2013-2018
Table 5 Sales of Tobacco by Category: % Value Growth 2013-2018
Table 6 Forecast Sales of Tobacco by Category: Volume 2018-2023
Table 7 Forecast Sales of Tobacco by Category: Value 2018-2023
Table 8 Forecast Sales of Tobacco by Category: % Volume Growth 2018-2023
Table 9 Forecast Sales of Tobacco by Category: % Value Growth 2018-2023

SOURCES

Summary 2 Research Sources

Cigarettes in Russia

HEADLINES

PROSPECTS

Ongoing decline in demand for cigarette
2018 witnesses a huge rise in illicit trade due to cheaper prices in neighbouring countries
Flavour capsule cigarettes continue to gain share

COMPETITIVE LANDSCAPE

Acquisition of Donskoy Tabak sees JTI Russia strengthen its leading position
British American Tobacco registers a further gain in share
Manufacturers continue to focus their new product development activity on flavour capsule cigarettes

TAXATION AND PRICING

Taxation rates
Summary 3 Taxation and Duty Levies 2013-2018
Average cigarette pack price breakdown
Summary 4 Average Cigarette Pack Price Breakdown: Brand Examples

CATEGORY DATA

Table 10 Sales of Cigarettes: Volume 2013-2018
Table 11 Sales of Cigarettes by Category: Value 2013-2018
Table 12 Sales of Cigarettes: % Volume Growth 2013-2018
Table 13 Sales of Cigarettes by Category: % Value Growth 2013-2018
Table 14 Sales of Cigarettes by Blend: % Volume 2013-2018
Table 15 Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2013-2018
Table 16 Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2013-2018
Table 17 Sales of Cigarettes by Pack Size: % Volume 2013-2018
Table 18 Sales of Cigarettes by Price Band: % Volume 2013-2018
Table 19 NBO Company Shares of Cigarettes: % Volume 2014-2018
Table 20 LBN Brand Shares of Cigarettes: % Volume 2015-2018
Table 21 Sales of Cigarettes by Distribution Format: % Volume 2013-2018
Table 22 Illicit Trade Estimate of Cigarettes: Volume 2013-2018
Table 23 Forecast Sales of Cigarettes: Volume 2018-2023
Table 24 Forecast Sales of Cigarettes by Category: Value 2018-2023
Table 25 Forecast Sales of Cigarettes: % Volume Growth 2018-2023
Table 26 Forecast Sales of Cigarettes by Category: % Value Growth 2018-2023
Table 27 Forecast Sales of Cigarettes by Blend: % Volume 2018-2023
Table 28 Forecast Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2018-2023
Table 29 Forecast Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2018-2023
Table 30 Forecast Sales of Cigarettes by Pack Size: % Volume 2018-2023
Table 31 Forecast Sales of Cigarettes by Price Band: % Volume 2018-2023

Cigars, Cigarillos and Smoking Tobacco in Russia

HEADLINES

PROSPECTS

Cigars only affordable to the most affluent Russians
Fine cut tobacco not seen as an alternative to cigarettes
Tobacco-free fruit mixes used to get around the hookah ban

COMPETITIVE LANDSCAPE

Lane still in complete control of cigars and cigarillos but local player Pogarskaya Sigaretno-Sigarnaya Fabrika also making gains
Al Fakher continues to lose share in smoking tobacco
Cigars, cigarillos and smoking tobacco mainly bought in specialist outlets

CATEGORY DATA

Table 32 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Volume 2013-2018
Table 33 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Value 2013-2018
Table 34 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Volume Growth 2013-2018
Table 35 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Value Growth 2013-2018
Table 36 Sales of Cigars by Size: % Volume 2013-2018
Table 37 Sales of Cigarillos by Price Platform 2013-2018
Table 38 NBO Company Shares of Cigars and Cigarillos: % Volume 2014-2018
Table 39 LBN Brand Shares of Cigars and Cigarillos: % Volume 2015-2018
Table 40 NBO Company Shares of Cigars: % Volume 2014-2018
Table 41 LBN Brand Shares of Cigars: % Volume 2015-2018
Table 42 NBO Company Shares of Cigarillos: % Volume 2014-2018
Table 43 LBN Brand Shares of Cigarillos: % Volume 2015-2018
Table 44 NBO Company Shares of Smoking Tobacco: % Volume 2014-2018
Table 45 LBN Brand Shares of Smoking Tobacco: % Volume 2015-2018
Table 46 NBO Company Shares of Pipe Tobacco: % Volume 2014-2018
Table 47 LBN Brand Shares of Pipe Tobacco: % Volume 2015-2018
Table 48 NBO Company Shares of Fine Cut Tobacco: % Volume 2014-2018
Table 49 LBN Brand Shares of Fine Cut Tobacco: % Volume 2015-2018
Table 50 Distribution of Cigars and Cigarillos by Format: % Volume 2013-2018
Table 51 Distribution of Smoking Tobacco by Format: % Volume 2013-2018
Table 52 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Volume 2018-2023
Table 53 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Value 2018-2023
Table 54 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Volume Growth 2018-2023
Table 55 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Value Growth 2018-2023

Smokeless Tobacco, E-Vapour Products and Heated Tobacco in Russia

HEADLINES

PROSPECTS

Dramatic growth of heated tobacco sees the category overtake e-vapour products in terms of value sales
Non cig-a-like systems also emerge strongly in 2018
Shake ‘n’ vape a growing trend

COMPETITIVE LANDSCAPE

Japan Tobacco takes the leading position in e-vapour products
Further regulation remains the main threat to manufacturers
Manufacturers of open vaping systems to face increasing challenges

CATEGORY INDICATORS

Table 56 Number of Adult Vapers 2013-2018

CATEGORY DATA

Table 57 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Volume 2013-2018
Table 58 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Value 2013-2018
Table 59 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Volume Growth 2013-2015
Table 60 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Value Growth 2013-2018
Table 61 Sales of Tobacco Heating Devices: Volume 2013-2018
Table 62 Sales of Tobacco Heating Devices: Volume 2013-2018
Table 63 Sales of Heated Tobacco: Volume 2013-2018
Table 64 Sales of Heated Tobacco: Value 2013-2018
Table 65 NBO Company Shares of Smokeless Tobacco: % Volume 2014-2018
Table 66 LBN Brand Shares of Smokeless Tobacco: % Volume 2015-2018
Table 67 NBO Company Shares of E-Vapour Products: % Value 2014-2018
Table 68 LBN Brand Shares of E-Vapour Products: % Value 2015-2018
Table 69 NBO Company Shares of Tobacco Heating Devices: % Volume 2014-2018
Table 70 LBN Brand Shares of Tobacco Heating Devices: % Volume 2015-2018
Table 71 NBO Company Shares of Heated Tobacco: % Volume 2014-2018
Table 72 LBN Brand Shares of Heated Tobacco: % Volume 2015-2018
Table 73 Distribution of Smokeless Tobacco by Format: % Volume 2013-2018
Table 74 Distribution of E-Vapour Products by Format: % Value 2013-2018
Table 75 Distribution of Tobacco Heating Devices by Format: % Volume 2013-2018
Table 76 Distribution of Heated Tobacco by Format: % Volume 2013-2018
Table 77 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Value 2018-2023
Table 78 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Value Growth 2018-2023
Table 79 Forecast Sales of Tobacco Heating Devices: Volume 2018-2023
Table 80 Forecast Sales of Tobacco Heating Devices: Value 2018-2023
Table 81 Forecast Sales of Heated Tobacco: Volume 2018-2023
Table 82 Forecast Sales of Heated Tobacco: Value 2018-2023